Wal-Mart halts India-specific lobbying in US: report

The matters related to FDI rules in India have figured among the 'specific lobbying issues' for the company since at least 2008. It could not be ascertained whether Wal-Mart has permanently stopped lobbying on India-related issues, or it is only a temporary halt.

Press Trust of India | Last Updated: July 28, 2013 15:07 (IST)

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Washington/New Delhi:

Global retail giant Wal-Mart has stopped its lobbying with the U.S. lawmakers on India-specific issues, after continuously seeking their support for about five years to facilitate its entry into the high growth Indian market.

The disclosure incidentally comes at a time when Indian government is preparing a report to be presented in Parliament next month based on findings of a probe into Wal-Mart's U.S. lobbying activities for getting an access to India.

According to the latest lobbying disclosure reports filed by Wal-Mart and its registered lobbyists with the U.S. Senate and the House of Representatives, the company spent close to $2 million (about Rs 12 crore) on various lobbying activities during the second quarter ended June 30.

However, no India-specific matter figures among close to three dozen issues discussed by Wal-Mart and its lobbyists with the lawmakers in the US during this period.

This has come as a major departure from the prior period lobby disclosure reports, including that for the preceding quarter (January-March 2013) wherein 'Discussions related to FDI in India' figured as one of the lobbying issues, the Congressional records show.

The company had spent a similar amount of about $2 million in the previous quarter as well on its lobbying activities, which are being undertaken by it directly as also through close to ten other registered lobby firms.

The matters related to FDI rules in India have figured among the 'specific lobbying issues' for the company since at least 2008. It could not be ascertained whether Wal-Mart has permanently stopped lobbying on India-related issues, or it is only a temporary halt.

Wal-Mart and many other overseas supermarket chains have been wanting to set shop for many years in India, which opened up this business for foreign players last year with a 51 per cent equity cap despite stiff political opposition.

Still, there are many restrictions, such as those on sourcing of products, that are keeping foreign multi-brand retailers away from the country.

While Wal-Mart and other foreign retailers continue to seek further easing of rules in India to help them set up their businesses, the government is preparing a report for Parliament on its Wal-Mart lobbying probe.

The one-man probe panel could not satisfactorily conclude its inquiry as it could not get necessary details on various issues, including the exact amount of money spent on India-specific lobbying issues.

The probe was ordered last December after it came to light that Wal-Mart had been spending millions of dollars on its lobbying activities in the US for years on various issues, including access to the Indian market and the relevant regulations.

As the probe was on, Wal-Mart continued to lobby on India-specific issues, among others, till the January-March quarter of this year, but has surprisingly halted the same now.

Without specifically mentioning the name of India or any other country in its latest quarter lobby disclosure report, the company has listed only generic matters like "discussions regarding investments overseas" and "discussions regarding transatlantic trade and investment partnership".

Wal-Mart, on its part, has been maintaining that it has disclosed all its lobbying activities as per the U.S. rules and it did not violate any Indian regulations in this regard. Wal-Mart spent a total amount of $6.13 million (about Rs 33 crore) on lobbying for various issues, including on "discussions related to FDI in India" in 2012 alone.

Lobbying is a legal activity in the US, but the companies and their lobbyists are required to make quarterly disclosures about the same to the US Congress.

The Wal-Mart probe committee, headed by former Chief Justice of Punjab and Haryana High Court Mukul Mudgal, was set up in January after the government announced in Parliament that it would get investigated the issue.

After looking into the matter for about three-and-a-half months, the committee submitted its report in May to the Corporate Affairs Ministry. Besides the US, the panel also tried to look into Wal-Mart's lobbying activities with government officials in India.

In the meantime, Wal-Mart last month announced a sudden exit of Raj Jain, head of its Indian venture with Bharti group. Mr. Jain and Wal-Mart Asia president & CEO Scott Price were the key managerial personnel who represented the company before the inquiry panel.